Entry of new firms will occur in a monopolistic competitive industry until:

Entry of new firms will occur in a monopolistic competitive industry until:
 a. marginal cost equals zero.
  b. marginal revenue equals zero.
  c. marginal revenue equals marginal cost.
  d. economic profit equals zero.
  e. economic profit is negative.

QUESTION 2

Payments to nonowners of a firm are called:
 a. implicit costs.
  b. accounting costs.
  c. explicit costs.
  d. economic costs.

QUESTION 3

As new firms enter a monopolistic competitive industry, it can be expected that:
 a. market price will increase.
  b. the output of existing firms will increase.
  c. profits of existing firms will increase.
  d. market demand should decrease.
  e. profits of existing firms will decrease.

QUESTION 4

The opportunity costs associated with the use of resources owned by a firm are:
 a. externalities.
  b. implicit costs.
  c. explicit costs.
  d. sunk costs.

QUESTION 5

The entry of new firms into a monopolistic competitive industry will shift the:
 a. market demand curve to the right.
  b. market demand curve to the left.
  c. existing firm's demand curve to the right.
  d. existing firm's demand curve to the left.
  e. market supply curve to the left.

QUESTION 6

Which of the following would be considered an implicit cost?
 a. Health insurance of employees paid for by the firm
  b. The water bill of the firm
  c. The salaries paid to the managers of the firm
  d. Foregone rent on assets owned by the firm

QUESTION 7

For both a monopolist and a monopolistically competitive firm:
 a. price equals average total cost.
  b. price is above marginal revenue.
  c. marginal revenue equals zero.
  d. marginal cost equals zero.